WHAT QUESTIONS SHOULD I ASK WHILE HOUSE HUNTING
There are normally many questions that home buyers will have throughout the process. Even an experienced home buyer can forget exactly how the process works and what the proper steps are to ensure the process is relatively smooth.
When buying a home, one of the most important things to understand is that “no question is a dumb question.” If you’re unsure of something when buying a home, ask!
1. WHAT IS A SHORT SALE?
Before you involve yourself with a short-sale, it’s important you know exactly what it is and what to expect. The easiest way to understand a short sale is the sale of a home in which the proceeds from the sale are less than the balance of debts secured by liens against the property and the home owner cannot afford to pay the liens in full.
Before purchasing a short sale, you should consider things such as the time it can take for a short sale response, the fact that a foreclosure is still possible, and that many short sale properties are in disarray. Short sales are not impossible to buy but you must be patient and be in no immediate rush to move.
2. WHAT IS A FORELOSURE?
Believe it or not, foreclosures can actually be a smoother transaction than a short sale. A foreclosure, sometimes referred to as a REO, is a property that a lender owns. When considering the purchase of a foreclosure, it’s important to know, most are “as-is.” Foreclosures, if not purchased by an owner occupant, are often purchased by investors, fixed up, “flipped,” and sold to a owner occupant.
3. HOW IS THE NEIGHBORHOOD/AREA?
When buying a home, this is a very common question home buyers have. As a real estate professional, there are rules against steering and providing personal insight into specific areas and neighborhoods. This doesn’t mean that your we cannot provide you with tips to help you choose the right neighborhood when buying a home. Many buyers wonder about the growth of the local economy, crime statistics, taxes, and local amenities. I like to share this information with all my clients when buying a home. I’ll make sure you’ll receive all of the pertinent information to allow you to make an educated decision on areas and neighborhoods in and around Madison, WI.
4. HOW ARE THE SCHOOLS?
This is another question that most Realtors should tread very lightly with. There is no doubt that schools impact property values. Just like tips for selecting a neighborhoods, a top Realtor should be able to provide you with names or websites where you can find information on the local schools so that you can determine whether or not the schools are acceptable to you or not.
5. WHAT ARE THE AVERAGE UTILITY BILLS?
When buying a home, it’s important to know what additional costs will be in addition to your monthly mortgage payment. Utility bills are just one of the additional costs to consider when buying a home. Utility bills can be obtained from the home owner and in some cases, from the local utility company, who can provide averages over the past 12 months. Keep in mind, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.
6. WHAT’S THE AGE OF THE HOUSE, CONDO…?
When looking at homes, many buyers want to know the ages of specific items in a home. The most popular items in a home that buyers want to know about are the major mechanical items, such as the roof, furnace, water heater, and air conditioning (if applicable). As a Realtor with experience, I can help find the dates of a furnace, water heater, and air conditioning unit by looking at the serial numbers. The roof age is often known by the home owner. If not, the age usually can be determined by looking at the roof characteristics, such as the sagging areas or the way the shingles look.
7. HOW MANY HOMES SHOULD I LOOK AT BEFORE PUTTING IN AN OFFER?
This question is often asked and is a simple answer. The answer is, there is no specific number of homes you should look at before buying a home. Don’t feel that if you were to purchase the first home you look at that you’re making a mistake. Same can be said if it takes you looking at 25 homes.
8. HOW MUCH SHOULD I OFFER THE SELLERS?
When buying a home, you are the only one who can determine how much you should offer a seller. Certainly it’s suggested you ask for your Realtors advice and thoughts, but ultimately you are the only person who can determine how much you should offer. My recent post for new home buyers can also help.
9. WHAT IS AN EARNEST MONEY CHECK / DEPOSIT?
An earnest money deposit is also frequently referred to as a good faith deposit. When a buyer purchases a home, they provide the seller’s real estate company a deposit to hold in their escrow account. The primary purpose of this deposit is to show a seller you are serious about purchasing their home. The amount that is deposited is subtracted from the final figure that a buyer pays at the closing table. In most cases, the larger the deposit, the stronger a purchase offer looks to a seller.
10. HOW LONG DOES THE SELLER HAVE TO RESPOND TO MY OFFER?
There is not a standard answer to this question. A purchase offer will have a “life time frame.” The “life time frame of the offer” can vary from 12 hours to 3 or 4 days. There are many possibilities that can effect the length of the offer. Your Realtor should know how long of a “life” to give to your offer. If you’re looking to purchase a home that is newly listed and the possibility of multiple offers exists, I recommend a shorter “life.” If the home you’re looking to purchase has been on the market for 3 months and the seller is located out of town, I recommend a 2 day “life.”
11. WHAT IF MY OFFER IS REJECTED?
When a purchase offer is submitted to the seller there are generally four possible responses. The first is an accepted offer, the second is a counter offer, the third is a rejected offer, and the final is an offer that is not responded to. If your offer is rejected, meaning the seller says no and doesn’t counter, you have the right to place another offer. It’s not very common an offer is rejected or not responded to, unless a seller is offended by a low-ball offer.
12. WHAT IS THE NEXT STEP?
Congrats! Your offer was accepted, now what? Between contract acceptance and the closing date, there are many things that you may need to complete. In a nutshell, after an offer is accepted, generally any inspections will be completed. After inspections, you complete a formal mortgage application. Last but not least, you may need to complete the title, abstract, survey, and any other paperwork. When buying a home, finding the perfect home is only one part of actually becoming a homeowner. Throughout the mortgage process, you should expect the lender to require documentation. They may need letters and other items from you to satisfy their stipulations. Don’t be upset when this happens, it’s completely normal. If you haven’t read Part 1 or Part 2, do so now.
When buying a home, preparation and education can really make a huge difference. Again, “no question is a dumb question” and if you are unsure of something, ask! The home buying process begins before you ever look at a home and continues all the way up to closing. When buying a home, it’s critical you’re on your game, stay organized, and remain focused throughout the entire process. After reading these frequently asked questions, you should now have a stronger understanding of what to expect throughout the process.
Richard Surek | Senior Mortgage Advisor | 608-960-4363 | firstname.lastname@example.org | richsurek.com